Comments on: He Said, She Said, We're (Not) Cluelesshttp://blogs.discovermagazine.com/intersection/2011/02/14/he-said-she-said-were-not-clueless/
Tue, 27 Sep 2011 17:28:30 +0000hourly1https://wordpress.org/?v=4.4.5By: Mike Hhttp://blogs.discovermagazine.com/intersection/2011/02/14/he-said-she-said-were-not-clueless/#comment-51049
Tue, 15 Feb 2011 16:00:00 +0000http://blogs.discovermagazine.com/intersection/?p=16017#comment-51049First, the boiler MACT rules set to take effect this spring do not only affect the power industry but applies to all operations that burn solid fuels or emit particulate matter. That means the paper and pulp industry, primary metal producers and processors, the chemical industry, cement producers, and many others fall under the boiler MACT rules.

The utilities will clean up, they have little choice but the other industries have other options. Some will pay the money to come into compliance, others will close because they cannot afford it and other will choose to relocate operations abroad. As one whose work is directly related to the new boiler MACT rules (ironically enough on the side that stands to reap the profits) I can tell you unequivocally that many plants are choosing closing or relocation over compliance as they cannot afford the upgrades or the upgrades will make them unprofitable.

On the utility side, the new rules will do nothing to make the units more efficient, it will only increase costs and starve them for capital. As the commenter above noted, quite accurately, the parable of the broken window comes into play here. Replacing a productive asset before the end of its lifecycle doesn’t benefit the economy as a whole. Perhaps one of the most ironic unintended consequences will be the drag that this rule has on biomass generation, as they produce far more particulate and HAP emissions than coal units do.

We can all agree that this will result in cleaner air partially because many factories will close their doors, but there is cost in employment. Maybe not so much for the utilities, but the economic cost for non utility industries affected by this rule will be high and mean 10,000’s if not 100,000’s of manufacturing jobs eliminated.

So yes Mr Mooney, you are clueless on this one.

]]>By: Nullius in Verbahttp://blogs.discovermagazine.com/intersection/2011/02/14/he-said-she-said-were-not-clueless/#comment-51048
Mon, 14 Feb 2011 23:16:53 +0000http://blogs.discovermagazine.com/intersection/?p=16017#comment-51048Why would you need to be clueless about this? It’s not a complicated point, nor does it take years of study to understand.

We discussed the “broken windows fallacy” here on this blog a couple of days ago. It’s an argument due to a 19th century French economist called Fred Bastiat, and it was specifically designed to be easy for the layman to understand. You can either read Bastiat himself, or perhaps Henry Hazzlitt.

As for the job-year, the confusion is going the other way. They calculate the creation of 1.5 million job-years over 5 years, which means that over the period of 5 years 1.5 million people get a job, each for 1 year. In terms of continuous employment (i.e. “jobs”, not “job-years”), which is what the reader of their summary would assume they meant, it’s actually only 300,000 jobs, each counted for the full five years. (And remember, these are new jobs in the same way that breaking windows creates jobs for glaziers in the parable.) Pulling the same trick, one could claim the creation of 18 million “job-months”, and transform that into the “creation of 18 million jobs over a five year period”. If each of those 18 million people should happen to work for one month each, it is a completely true statement – 18 million jobs. In my view, to claim that this was done through ignorance is to take a very generous line indeed. I agree that it is highly unlikely they didn’t know exactly what they were doing.

But what is a poor journalist to do? Well, in one sense there is no alternative but to buckle down and learn enough of the subject to know what the hell you’re writing about. It is the job of a journalist to spend the time learning and digesting the knowledge into a more easily absorbed form, to save the readers from the effort. That’s basically why journalists get paid. But for a quick answer, you could try asking either the author or any friendly right-leaning journalist or economist of your acquaintance (do you know any?) to break it down further and help you understand. Ask questions, and keep on asking them until it becomes clear, either you understand what they’re saying (and you know and can say exactly why you don’t agree with it), or that they’re talking nonsense and you can prove it.

Heck, you could even have asked me! At the mere hint of an opportunity to pontificate at length on free market economics, I’m sure you would find great depths of patience. Or you could have asked at any right-wing economics blog, for free. Critics and opponents are a marvellous resource, which any wise journalist should take ruthless advantage of.